2008 (12) TMI 560 - AT - Central Excise

Summary

Issues involved: Appeal against order-in-appeal denying Cenvat credit transfer from closed unit to new unit, demand of interest, and penalty imposed by Original Authority.

Issue 1 - Cenvat credit transfer denial:
The respondent closed their unit in Bangalore and shifted operations to Hubli, transferring the balance of Cenvat credit. The Revenue challenged the credit transfer, alleging lack of evidence of proper accountal of inputs and capital goods. The Commissioner (Appeals) upheld the denial of credit due to insufficient evidence of transfer. However, he noted that interest and penalty were imposed without evidence of credit utilization for duty payment.

Issue 2 - Demand of interest:
The Revenue contested the Commissioner's decision to set aside the demand of interest, citing Section 11AB and Rule 14 of Central Excise Rules, claiming interest is mandatory when Cenvat credit is wrongly taken. The respondent argued that the credit entry was reversed, and there was no proof of credit utilization for clearance, leading to the Commissioner's decision to waive the interest demand.

In conclusion, the Commissioner (Appeals) found the demand of interest unwarranted due to lack of evidence of credit utilization, leading to the dismissal of the Revenue's appeal. The judgment highlights the importance of proper documentation and evidence in Cenvat credit transfers and the necessity of demonstrating credit utilization to avoid interest liabilities.